The asset management giant BlackRock submitted an application for a spot bitcoin ETF to the US Securities and Exchange Commission (SEC) yesterday (15), and sought out Coinbase and Bank of New York Mellon as custodians of bitcoin and cash respectively. What about the Bitcoin spot ETF?
BlackRock Launches Bitcoin Spot ETF
According to the application documents submitted to the SEC, iShares Delaware Trust Sponsor, a subsidiary of BlackRock, filed an application for the bitcoin spot ETF "iShares Bitcoin Trust".
According to the document, the assets of this trust fund are mainly composed of bitcoins held by the custodian on behalf of them, and are designed to reflect the performance of bitcoin prices.
The Bitcoin custodian will be the custody company of Coinbase, the Bank of New York Mellon will be the cash custodian, and the CF Bitcoin reference exchange rate of the CME Group will serve as the benchmark price of the ETF's net asset value.
If this ETF can be successfully issued, it will be listed on Nasdaq, and issued and redeemed in units of 40,000 shares or an integer multiple thereof.
The First Bitcoin Spot ETF Is Yet to Come
As one of the world's largest asset management groups, BlackRock's asset management scale reaches several trillion U.S. dollars, and it is the strongest challenger to apply to the SEC for Bitcoin spot ETF over the years.
However, BlackRock's choice of Coinbase as the custodian of Bitcoin does not seem to be a wise choice. After all, SEC Chairman Gary Gensler publicly stated in March this year that investment advisors should not rely on cryptocurrency exchanges as qualified custodians.
In the past, the SEC has approved the issuance of multiple bitcoin futures ETFs, but the bitcoin spot ETF has been reluctant to release, and the applications of companies such as Grayscale and Ark have also been rejected several times.
The main reason for the SEC's blocking is that Bitcoin spot is not regulated and the market is quite fragmented. In case of any problems, like liquidation and custody issues, the SEC cannot fully protect investors.
(Extended reading: Grayscale dead game? SEC’s first legal briefing that prevents Grayscale from transforming into an ETF: futures and spot goods are completely different commodities )
With Bitcoin spot still difficult to regulate, it remains to be seen whether BlackRock has a chance to be favored by the SEC.
